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The year 2017 was a blockbuster for investors as all the three major indices indicating the health of the U.S. market closed at record levels. An improved economic data for GDP, steady job additions, a favorable Consumer Confidence Index as well as factory activity data kept investors optimistic about the economy.

Technology Sector in Particular

The Tech sector was one of the largest beneficiaries of this rally, with the Technology Select Sector SPDR ETF (XLK) registering a return of 32.2% in the last year, on top of a 12.9% gain it had registered in 2016.

Per the latest forecast provided by Gartner Inc. (IT) on worldwide IT spending, the independent research firm projects global IT spending to reach $3.7 trillion this year, reflecting an increase of 4.3% from $3.5 trillion projected in 2017.

Why Growth Stocks?

Growth investors look for stocks with earnings and revenue growth rates that are relatively better than the market. This investment strategy comes with its fair share of risks, but it also brings the exciting possibility of outsized returns — an end goal that every investor desires.

Growth stocks can be some of the most exciting picks right now, as these stocks can capture investors’ attention, and yield big returns too. Today, we will discuss a few technology stocks, which performed well in 2017 and have the potential to grow in 2018.

Picking the Right Stocks

It’s a daunting task to bet on stocks, which are currently undervalued, yet with high-growth potential. However, with the help of our new style score system, we have picked the stocks mentioned below that look promising based on their encouraging Zacks Rank and favorable Growth Style Score.

Our Growth Style Score condenses all the essential metrics from a company’s financial statements to get a true sense of the quality and sustainability of its growth. Our research shows that stocks with Growth Style Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy) offer the best investment opportunities in the growth investing space. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

4 Solid Picks

Facebook Inc. (FB - Free Report) helps in creating and fostering social networks through its web-based portal. The company's efforts in mobile and live videos continue to pay off big time. Instagram remains another important revenue stream. Apart from mobile and video, monetization opportunities of the company’s other subsidiaries — Messenger, WhatsApp and Oculus — and a huge user base/higher engagement level are expected to drive growth going ahead.

The company carries a Zacks Rank #2 with a Growth Style Score of A. The company delivered positive surprises in each of the trailing four quarters with an average beat of 14%.

Based on the Zacks Consensus Estimate, we expect Facebook to finish fiscal 2017 with EPS growth of 37.6%. That expansion is expected to continue next year, with current estimates anticipating earnings growth of an additional 12.7% and revenue growth of 34.4%.

Shares of Facebook have gained 39.8% in the past year, outperforming the 25.5% rally of the industry it belongs to.

Applied Materials (AMAT - Free Report) is one of the world’s largest suppliers of fabrication equipment to semiconductor, LCD and solar PV cell manufacturers. The company sees significant opportunities from emerging trends on the semiconductor and display fronts such as artificial intelligence, big data, cloud infrastructure, Internet of Things (IoT), virtual reality and smart vehicles

The EPS estimate for the current year has been revised upward to $4.04 from $3.71 per share in the last 60 days. Also, based on the Zacks Consensus Estimate, Applied is expected to finish the current year with EPS growth of 24.3% and sales growth of 16.2%.

The stock sports a Zacks Rank #1 and has a Growth Style Score B.

Shares of the company have increased 58.2% on a 12-month basis, outperforming the industry’s growth of 56.5%.

Lam Research Corporation (LRCX - Free Report) supplies wafer fabrication equipment and services to the semiconductor industry. The company is doing well and continues to succeed in areas such as device architecture, process flow and advanced packaging technology inflections. It continues to witness increased adoption rates of 3D NAND technology, FinFETs and multi-patterning.

Based on the Zacks Consensus Estimate, Lam Research is expected to finish the current year with EPS growth of 47.7% and sales growth of 28.8%. That expansion is expected to continue next year, with current estimates anticipating earnings growth of 0.7% and revenue growth of 3.2%.

The stock carries a Zacks Rank #2 and has a Growth Style Score A.

Shares of Lam Research have gained 70.5% over the last year, substantially outperforming the 56.5% rally of the industry it belongs to.

Broadcom Limited (AVGO - Free Report) is a premier designer, developer and global supplier of a broad range of semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor (CMOS) based devices and analog III-V based products.

Broadcom is witnessing upward estimate revisions — up 12 cents to $19.33 per share for current year in the last 30 days.

Based on the Zacks Consensus Estimate, Broadcom is anticipated to finish the fiscal year 2018 with EPS growth of 20.7% and revenue growth of 16.6%. This expansion is expected to continue next year, with current estimates anticipating earnings growth of 4.94% and revenue growth of 7.9%.

On top of this, Broadcom is currently a Zacks Rank #1 stock and has a Growth Style Score B.

Shares of Broadcom have gained 46.5% in the last one year, outperforming the 33.6% rally of the industry it belongs to.

Today's Stocks from Zacks' Hottest Strategies

It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.

And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.

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At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.99% per year. These returns cover a period from January 1, 1988 through January 7, 2019. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations.

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